Hong Kong Remains Globally Favoured Despite Setbacks Affecting the Jurisdiction
Year in year out, Hong Kong had always been the top destination in terms of business affairs. Its pro-business environment and government efficiency make it a favoured place by all sizes of business organisations. The year 2019 saw Hong Kong plagued with social unrest for several months. After it fizzled, the pandemic Covid-19 took place. These difficult times have caused Hong Kong its global competitiveness ranking. The IMD, acronym for International Institute for Management Development, has recently published the World Competitiveness Yearbook 2020 and Hong Kong competitiveness has dropped by few places. Hong Kong now ranks at no. 5 in the World Competitiveness Yearbook 2020.
According to IMD competitive factors, Hong Kong’s economic performance took a dip from tenth place to 28th. Within the main factor related to financial performance, a sub-factor, namely Domestic economy dived deep from 18th place to 49th place. The local economy had to deal with high-level acts of violence, vandalism and people intimidation because there was a political indifference. Both locals and foreign voiced their concern over how the world views Hong Kong amidst the social unrest. As we know it, Hong Kong is politically stable, and its open economy has attracted many global players. This results in a flourishing Hong Kong for years. Nevertheless, the sub-factors like International Trade and International investment for Hong Kong remains sound and reliable.
Undeniably, Hong Kong retains its government efficiency. Even with social unrest, the Hong Kong government remains constant in providing a solution to investors and locals alike. There are many more factors for competitiveness where Hong Kong is victorious. For instance, Institutional framework sub-factor improved to being in first place globally. Hong Kong also moved up 18 spots from 19th to the first in the Exchange rate stability indicator. Another indicator that Hong Kong has improved in the recent report is Infrastructure. Factors such as these adequately indicates Hong Kong competitiveness is up to par if not better in the previous years. With scores like these, global investors are likely to stick around longer.
The hype of Mainland pushing for legislation over Hong Kong has global investors rethinking their strategies. Hong Kong needs to be able to safeguard national security. Thus, improving the legal system and enforcement mechanisms in the jurisdiction is purely to prevent, curb and sanction small minority of offenders. It is aimed at safeguarding Hong Kong’s security as well as the ability to prosper in all aspects. The “One Country Two Systems” has worked for so many years, and the principle will continue as usual. Under the policy, Hong Kong has enjoys judicial independence, efficient public sector, open and flexible markets, low tax regime as well as a conducive business environment. Hence, Hong Kong competitiveness will remain stable in the future.